2023 (1) TMI 726 - HC - Income Tax

Reopening of assessment u/s 147 - second notices under Section 148 of the Income Tax Act, 1961, relating to the same assessment years instead of completing the assessment on returns filed in response to the first notices under Section 148 - whether a second notice u/s 148 issued by the assessing officer after the expiry of one year as per Section 153(6)(i) is valid without disposing the return filed to the first notice issued under Section 148 of the Income Tax Act for the very same assessment year - HELD THAT - Relevant provision of law under Section 153(6)(i) of the Income Tax Act, 1961, and the judgment of the Division Bench of this Court in the case of INDIAN TUBE CO. LIMITED. VERSUS INCOME-TAX OFFICER. 2004 (6) TMI 18 - CALCUTTA HIGH COURT respondent assessing officer concerned was not justified in law in issuing impugned second notices u/s148 relating to the same assessment years instead of completing the assessment on returns filed in response to the first notices under Section 148 of the Act after disposing the objection filed by the petitioner by passing a reasoned and speaking order as per earlier order/direction of this Court in earlier writ petition remanding the matter back to the assessing officer. Action of the assessing officer allowing the expiry of period of limitation of one year to complete the assessment as per Section 153(6)(i) from the date of order of this Court in earlier writ petition on the first notices under Section 148 of the Act relating to same assessment year and issuing second notice in respect of the very same assessment year is not legal and valid. In view of the reasonings and discussion made above the impugned second notices under Section 148 of the Income Tax Act, 1961, relating to assessment years 2012-13 and 2013-14 and all subsequent proceedings are quashed.

Summary

Issues:
Validity of a second notice under Section 148 of the Income Tax Act, 1961 issued after the expiry of one year without disposing of the return filed in response to the first notice for the same assessment year.

Analysis:
The writ petition before the Calcutta High Court raised the issue of the validity of a second notice under Section 148 of the Income Tax Act, 1961. The petitioner contended that the assessing officer had issued a second notice after the expiry of one year without disposing of the return filed in response to the first notice for the same assessment year. The petitioner argued that this action violated the statutory provision under Section 153(6)(i) of the Act, which requires the completion of assessment within the prescribed time limit. The petitioner relied on a previous decision of a Division Bench of the Court, which held that without disposing of the return filed in response to the first notice, issuing a second notice for reopening the assessment was impermissible under the law.

The respondent, representing the Income Tax Authority, defended the issuance of the second notices under Section 148 of the Act for the same assessment year. The respondent argued that the assessing officer could issue a second notice without withdrawing the first notice or passing a final assessment order on the return filed in response to the first notice, as long as the time limit for issuing the notice had not expired. However, the Court rejected this argument, emphasizing the provisions of Section 153(6)(i) of the Income Tax Act and the precedent set by the Division Bench in a previous case involving similar issues.

After considering the facts, relevant legal provisions, and the previous judgment of the Division Bench, the Court concluded that the assessing officer was not justified in law in issuing the impugned second notices for the same assessment years. The Court held that the assessing officer should have completed the assessment on the returns filed in response to the first notices, as directed by the earlier order of the Court in a previous writ petition. The Court found the action of allowing the expiry of the limitation period and issuing a second notice for the same assessment year to be illegal and invalid. Consequently, the Court quashed the impugned second notices under Section 148 of the Income Tax Act for the assessment years in question and disposed of the writ petition accordingly.